Argo Blockchain Files for IPO—What Happens to the OTC Ticker?

London-based blockchain company Argo Blockchain Plc has filed for an IPO to list on the U.S. markets. What’s the IPO date and price for the stock and should you buy the IPO? What will happen to the OTC ticker?

After the lull in August, the U.S. IPO market is coming back to life now. Along with Argo Blockchain, several companies including Freshworks and Remitly have filed for an IPO. Dutch Bros has also gone public, pricing its shares above the initial price range. This indicates a strong appetite for IPOs. In 2021, several companies had to lower the IPO price range amid the tepid response from investors.

Argo Blockchain is coming up with an offering to sell 7,500,000 ADS (American depositary shares). Each ADS would represent 10 ordinary shares of the company. The London-listed shares of the company closed 10.7 percent higher at 149p on Sept. 14. The company has priced at IPO at $18.40 based on the Sept. 10 closing prices of its London-listed shares.

This would give the blockchain company a market cap of $855 million on a fully diluted basis. The listing date isn't final yet but it's expected in the next week.

The outlook for blockchain companies looks positive based on the growing adoption of cryptocurrencies. Argo Blockchain calls itself a “global leader in sustainable blockchain infrastructure and cryptocurrency mining.” Founded in 2017, the company operates its equipment in North America and aims to capitalize on renewable energy in the region.

The energy intensity of cryptocurrencies has been under scrutiny since most of the mining is concentrated in China. The country has a lower mix of renewable energy in its total energy generation. Elon Musk, who has been among the biggest backers of cryptocurrencies, also had a breakup with Bitcoin and doubted its green credentials.

Argo Blockchain generated revenues of $54 million in the 12 months ended June 30. Based on the pro forma market cap, we get a trailing price-to-sales multiple of 15.8x. To put that in perspective, Riot Blockchain trades at an LTM (last-12-months) price-to-sales multiple of 42.4x.

Argo Blockchain looks like a good stock to buy considering its green credentials and the growing adoption of cryptocurrencies. Crypto miners like Argo Blockchain are a good way to play the adoption of cryptocurrencies.

According to TipRanks, only one analyst is currently covering the London-listed shares of Argo Blockchain and the target price of 248.57p is a premium of 71 percent over the current prices. Argo Blockchain is a fast-growing company.

In its August update, Argo Blockchain said that its mining revenue was $9.43 million compared to $7.75 million in July. While its August revenues were higher than the previous month, it mined fewer Bitcoins in the month.

You can buy Argo Blockchain IPO stock when the company lists next week. You can buy the stock through any of the brokers. If you want exposure right now, you could do so by buying the stock in the OTC market where it trades under the ticker symbol “ARBKF.”

You could also buy the London-listed shares as many U.S. brokers allow trading in foreign-listed stocks.

Usually, the OTC shares get converted to the normal shares when the company is listed on the U.S. stock exchanges. Once Argo Blockchain lists on the Nasdaq, the OTC shares would also get converted to the normal shares.